Japan ruling party kingpin cool on sales tax hike

Japanese ruling party kingpin Ichiro Ozawa said on Monday the government could carry out its policies for the time being by cutting waste rather than raising taxes, throwing cold water on a debate on the sales tax.

Greece’s debt woes have turned the spotlight on Japan’s debt burden, now nearly twice the size of its economy. But with a mid-year election nearing, Japanese politicians are sending mixed messages on fiscal policy, risking damage to the government’s credibility.

Asked about suggestions that the ruling Democratic Party should promise in its platform for an upper house election expected in July to raise the 5 percent sales tax after a poll for the powerful lower house, Ozawa said he was unaware of that debate.

“Our biggest assertion to the people is to shift from control by bureaucrats to control by politicians, which means politicians must be responsible for policy decisions,” said Ozawa, who is the Democratic Party’s secretary-general and seen by many as the power behind prime minister Yukio Hatoyama’s government.

“By doing that, we will thoroughly eliminate waste,” he told a news conference, adding that it was important to halt huge public investment in quasi-public corporations and shift authority to local governments. “If politicians make such a decision… we can for the time being carry out our promised policies.”

Hatoyama, his ratings sinking in opinion polls on doubts about his leadership as well as voter concerns about a funding scandal embroiling Ozawa, has distanced himself from calls in his party to include a hike in the sales tax in the party manifesto.

http://www.reuters.com/article/idUSTOE64G06T20100517

 

Category: Japan